CBN Slashes BDCs’ Dollar Sales to $10,000

The Central Bank of Nigeria, CBN, will on Wednesday, January 6, sell $10,000 to each of the 2,839 bureaux de change, BDC, operators it approved last week.

President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, who disclosed this on Monday, January 4, said the apex bank took the decision because demand for dollar is still low as business activities were yet to pick up after the holidays.

He said the CBN has promised to continue the intervention to bridge the widening gap between the official and parallel market rates, saying the naira still exchanges for between N262 to N265 against the dollar at the parallel market, but exchanges for N199 at the official market.

Also, the CBN has issued new guidelines for the operation of BDCs which pegged the minimum capital base and cautionary deposits for intending operators at N70 million.

The guideline, which is in line with the exercise of the powers conferred on it by the Central Bank of Nigeria Act of 2007 and the Banks and Other Financial Institutions Act 2004 (BOFIA), also stipulates a non-refundable application fee of N100,000 and non-refundable licensing fee of N1 million.

The circular, which took effect on January 1, orders retail money exchanges to deposit a mandatory cautionary deposit of N35 million in an account with the CBN, in addition to a minimum capital requirement of N35 million.

The CBN has been struggling to shore up the naira, hit by the plunge in oil prices which started late last year.

According to the guideline, an intending BDC operator is also to provide non-refundable annual licensing renewal fee of N 250,000 and a non-refundable change of name fee of N100,000.

The new guideline stipulated that no person shall carry on the business of BDC in Nigeria, except with the prior authorization of the CBN. It also stipulated that a BDC shall be construed as any company that is licenced to carry on small scale foreign exchange business in Nigeria and whose sole object is the carrying on of such business on a stand-alone basis. It said the application for BDC licence shall be processed in two stages, namely: approval-in-principle (AIP) and final licence.


Leave a Reply